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Italy: IVASS urges UK insurers to submit their hard Brexit plan

On 02 July 2019 IVASS (the Institute for the Supervision of Insurance) issued a letter addressed to UK Insurers pursuing business in Italy, asking to submit a plan on the measures adopted in case of hard Brexit (the “Letter”).

BACKGROUND

The Law Decree no. 22 of 25 March 2019 (the “Decree”), converted into Law no. 41 of 20 May 2019, has established urgent measures to guarantee the continuity of the markets and of the intermediaries in case of a no-deal Brexit.

As for the insurance sector, the Decree sets out that starting from the date of withdrawal of the UK from the EU (the “Withdrawal Date”), UK insurance undertakings carrying out insurance activity in Italy under Freedom of Establishment and/or Freedom of Services:

will be removed from the Italian register of insurance undertakings;

will be given a transitional period of 18 months, during which they will only be authorised to manage their existing contracts and covers;

will not be entitled either to execute new insurance policies nor to renew the existing ones;

must inform policyholders and insureds of the new regime;

Moreover, the Decree provides that within 90 days from its entry into force, UK undertakings must submit to IVASS a contingency plan containing the measures taken for the management of the Italian portfolio in case of a hard Brexit (the “Plan”). The Letter concerns the submission of this Plan.

THE LETTER ISSUED BY IVASS

The Decree entered into force on 26 March 2019, therefore the deadline for the submission to IVASS of the Plan expires on 24 June.

In the light of that, IVASS asked UK insurers to promptly send the Plan, in case they have not already done it.

The Plan shall describe the measures adopted in order to ensure the correct management of Italian insurance contracts still ongoing at the Withdrawal Date, including claims payments, and can be sent:

by certified email (PEC) to invass@pec.it; or

for undertakings operating in Italy via freedom to provide services which have no PEC, by ordinary email to servizio.tutelaconsumatore@ivass.it.

Future Dates

*31 October 2019

31 October 2019 if the UK holds European Elections, but UK Parliament has not ratified the WA before that date; or

The 1st day of the month after ratification if UK Parliament ratifies the WA before October 2019.

31 December 2019

Following PRA's policy statement (PS10/17) - operational continuity firms are expected to submit the template (PRA109) 45 business days after the first reporting period ending 31 December.

*2020

The date by which all references to CRA ratings in laws and regulations relating to banks are to be removed. This will be done by the Commission based on technical advice from ESMA. EIOPA will be responsible for implementation.

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